UKH has welcomed the interim Pre-Budget report from the BEIS Committee of MPs into the impact of coronavirus on business and workers. The report highlights the damaging effect of high levels of indebtedness on a future recovery and also highlights the unresolved issue of rent debt.
On rent debt, the Committee highlights that landlords and businesses will not ‘be able to identify a solution on their own in every case’. It argues that Government should be looking at longer-term ‘active measures to address the issue of growing commercial rent arrears’. This must involve businesses, landlords, banks and other stakeholders.
Kate Nicholls, CEO, UKHospitality commented, “The report of the BEIS Committee is hugely important and extremely timely. It is right to highlight that the Budget should focus further support on those sectors that need it most. As businesses begin to look to reopening, they are encumbered with a millstone of debt around their necks, holding back their revival, investment and job creation potential.
“We have worked proactively with Government on finding long-term solutions to the rent debt situation but it is clear that more radical action is needed. This needs all stakeholders to appreciate that they will need to take their share of the pain. Hospitality businesses cannot be expected to pay full rent in a year in which they have been either shut or heavily restricted. The first step is an urgent extension of the rent moratoria to allow time to find solutions.
“The proposal to look into converting loans into grants to facilitate future growth is an interesting one and could be a major boost to small and medium-sized businesses who are struggling under huge amounts of debt.”